Consolidated Financial Results

for the Fiscal Year Ended MARCH 31, 2023

(Under Japanese GAAP)

May 9, 2023

Company name:

SEIKO GROUP CORPORATION

Listing: Tokyo

Securities code:

8050

URL: https://www.seiko.co.jp/en/

Representative:

Shuji Takahashi, President

Inquiries:

Shimesu Takizawa, Director, Executive Vice President and Chief Financial Officer

Telephone: +81-3-3563-2111

Scheduled date of annual general meeting of shareholders:

June 29, 2023

Scheduled date to commence dividend payments:

June 30, 2023

Scheduled date to file annual securities report:

June 29, 2023 (in Japanese)

Preparation of supplementary material on financial results:

Available

Holding of financial results briefing:

Scheduled (for institutional investors and analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)

(1) Consolidated operating results

( Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Fiscal year ended

Millions of yen

Millions of yen

Millions of yen

Millions of yen

March 31, 2023

260,504

9.7

11,233

28.1

11,167

12.4

5,028

(21.6)

March 31, 2022

237,382

17.1

8,770

299.7

9,939

-

6,415

84.6

Note: Comprehensive income

For the fiscal year ended March 31, 2023:

12,576

million

[5.9%]

For the fiscal year ended March 31, 2022:

11,870

million

[9.4%]

Basic earnings

Diluted earnings

Return on equity

Ratio of ordinary

Ratio of operating

per share

per share

profit to total assets

profit to net sales

Fiscal year ended

%

%

%

March 31, 2023

121.86

121.86

4.0

3.3

4.3

March 31, 2022

155.56

155.56

5.5

3.1

3.7

Reference:

Share of profit (loss) of entities accounted for using equity method

1,224

For the fiscal year ended March 31, 2023:

million

For the fiscal year ended March 31, 2022:

898

million

(2) Consolidated financial position

Total assets

Net assets

Equity-to-asset ratio

Net assets per share

As of

Millions of yen

Millions of yen

Yen

March 31, 2023

355,915

131,748

36.5

3,144.81

March 31, 2022

327,533

121,624

36.7

2,911.17

Reference:

Equity

As of March 31, 2023:

129,792 million

As of March 31, 2022:

120,067 million

(3) Consolidated cash flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash equivalents

operating activities

investing activities

financing activities

at end of period

Fiscal year ended

Millions of yen

Millions of yen

Millions of yen

Millions of yen

March 31, 2023

9,261

(15,535)

10,564

36,209

March 31, 2022

20,358

(9,318)

(13,909)

30,738

2. Cash dividends

Annual dividends per share

Total cash

Ratio of

Payout ratio

dividends to

dividends

First

Second

Third

Fiscal

(Consolidated)

net assets

Total

(Total)

quarter-endquarter-end

quarter-end

year-end

(Consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

Fiscal year ended

March 31, 2022

-

25.00

-

25.00

50.00

2,067

32.1

1.8

Fiscal year ended

March 31, 2023

-

37.50

-

37.50

75.00

3,100

61.5

2.5

March 31, 2024

-

37.50

-

37.50

75.00

38.7

(Forecast)

3. Consolidated financial forecast for the fiscal year ending March 31, 2024 (From April 1, 2023 to March 31, 2024)

( Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Basic earnings

owners of parent

per share

Fiscal year ending

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

March 31, 2024

268,000

2.9

12,000

6.8

12,000

7.5

8,000

59.1

193.84

* Notes

  1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): Not Applicable

Newly included: Not applicable

Excluded: Not applicable

(2) Changes in accounting policies, changes in accounting estimates, and restatement

i) Changes in accounting policies due to revisions to accounting standards and other regulations

: Applicable

ii) Changes in accounting policies due to other reasons

: Not applicable

iii) Changes in accounting estimates

: Not applicable

iv) Restatement

: Not applicable

(Note) Refer to Changes in accounting policies, (5) Notes to Consolidated Financial Statements, 3. Consolidated Financial Statements and Major Notes, for detail.

  1. Number of issued shares (common shares)
    1. Total number of issued shares at the end of the period (including treasury shares)

As of March 31, 2023

41,404,261

shares /

As of March 31, 2022

41,404,261

shares

ii) Number of treasury shares at the end of the period

As of March 31, 2023

132,337

shares /

As of March 31, 2022

160,535

shares

iii) Average number of shares outstanding during the period

Fiscal year ended March 31, 2023

41,262,123

shares

Fiscal year ended March 31, 2022

41,240,659

shares

(Note) For the purpose of calculating the number of treasury shares at the end of period and the average numbers of shares issued during the period, treasury shares held in the Board Benefit Trust (BBT) are included in the treasury shares deducted in the calculation.

[Reference] Overview of non-consolidated financial results

1. Non-consolidated financial results for the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)

(1) Non-consolidated operating results

( Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit

Fiscal year ended

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

March 31, 2023

15,312

27.1

1,195

-

1,560

-

2,562

(21.3)

March 31, 2022

12,043

6.6

(288)

-

(473)

-

3,257

108.7

Basic earnings

Diluted earnings

per share

per share

Fiscal year ended

Yen

Yen

March 31, 2023

62.06

-

March 31, 2022

78.94

-

(2) Non-consolidated financial position

Total assets

Net assets

Equity-to-asset ratio

Net assets per share

As of

Millions of yen

Millions of yen

%

Yen

March 31, 2023

201,299

57,534

28.6

1,393.32

March 31, 2022

187,644

57,120

30.4

1,384.23

Reference: Equity

As of March 31, 2023:

57,534 million

As of March 31, 2022:

57,120 million

  • Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.
  • Proper use of earnings forecasts, and other special matters

(Cautionary statements with respect to financial forecast)

The financial forecasts which appear in this report have been prepared based solely on the information which was available to the Company as of the date on which the report was released and the Company does not in any way guarantee the achievement of the forecasts. Actual results may differ significantly from the forecasted figures due to a number of factors. For assumptions used in the financial forecasts and instructions to use the financial forecasts, refer to (4) Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2024 (FY2023), 1. Business Results, for detail.

SEIKO GROUP CORPORATION

Consolidated Financial Results: FY2022

Page 3/24

Contents

1. Business Results

(1)

Overview

4

(2)

Financial Condition

6

(3)

Overview of Cash Flows

7

(4)

Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2024

(FY2023)

8

2.

Basic Policy on Adoption of Accounting Standards

9

3. Consolidated Financial Statements and Major Notes

(1)

Consolidated Balance Sheets

10

(2)

Consolidated Statements of Income and Comprehensive Income

13

(3)

Consolidated Statements of Changes in Equity

15

(4)

Consolidated Statements of Cash Flows

17

(5)

Notes to Consolidated Financial Statements

19

(Going concern assumption)

19

(Changes in accounting policies)

19

(Segment information)

20

(Per share information)

23

(Significant subsequent events)

24

SEIKO GROUP CORPORATION

Consolidated Financial Results: FY2022

Page 4/24

1. Business Results

(1) Overview

In the world economy during the fiscal year ended March 31, 2023, many markets experienced a distinct slowdown due to inflationary concerns against the backdrop of factors such as rising prices primarily due to a concurrent global economic recovery since the previous fiscal year, as well as soaring international commodity prices due to the impact of the situation in Ukraine, and progress in monetary tightening in various countries. In China, although there were supply chain disruptions due to the lockdown under the government's "zero-COVID" policy, the policy was abolished during the fiscal year, and the economy has been on a recovery trend thereafter. Meanwhile, the Japanese economy is on a gradual recovery trend, due to a marked recovery in personal consumption as the impact of the novel coronavirus eased, as well as an expected return of demand from foreign tourists, despite a sense of stagnation caused by the global economic downturn and rising prices.

(Millions of yen)

FY2020

FY2021

FY2022

Variance

Variance

(a)

(b)

①

① - (a)

① - (b)

Net sales

202,671

237,382

260,504

57,833

23,122

Operating profit

2,194

8,770

11,233

9,039

2,462

%

1.1%

3.7%

4.3%

3.2pt

0.6pt

Ordinary profit

633

9,939

11,167

10,534

1,228

%

0.3%

4.2%

4.3%

4.0pt

0.1pt

Profit attributable to owners of parent

3,475

6,415

5,028

1,553

(1,386)

%

1.7%

2.7%

1.9%

0.2pt

(0.8pt)

Exchange rate (v. JPY)

USD

106.1

112.4

135.5

29.4

23.1

EUR

123.8

130.6

141.0

17.2

10.4

Amid these circumstances, the Company launched the five-year Eighth Mid-Term Management Plan, "Seiko Milestone 145 = SMILE145," which began in the fiscal year ended March 31, 2023, and proceeded with business development centered on the three newly defined strategic domains of "Emotional Value Solutions Business (EVS Business)," "Devices Solutions Business (DS Business)," and "Systems Solutions Business (SS Business)."

In the EVS Business, the Watches Business and WAKO Business for the Japanese market recovered significantly on the back of improved personal consumption. In the Watches Business for overseas markets, net sales also grew in many countries and regions. Although the DS Business continued to increase net sales by steadily capturing favorable demand in the first half of the fiscal year, market conditions deteriorated sharply from the third quarter onward, resulting in a sharp slowdown in net

SEIKO GROUP CORPORATION

Consolidated Financial Results: FY2022

Page 5/24

sales, especially for devices for consumer products. In the SS Business, net sales exceeded those of the previous fiscal year, thanks to successful efforts to diversify business and expand the stock business. As a result, for the fiscal year ended March 31, 2023, the Group reported consolidated net sales of 260.5 billion yen, a year-on-year increase of 9.7%.

On an overall consolidated basis, domestic net sales came to 132.6 billion yen (a year-on-year increase of 6.6%), and overseas net sales were 127.8 billion yen (a year-on-year increase of 13.2%). Overseas net sales comprised 49.1% of net sales overall.

Advertising and promotion expenses for the fiscal year ended March 31, 2023 increased by approximately 15% from the previous fiscal year. Although labor costs and other selling, general and administrative expenses also increased year on year, operating profit improved by 2.4 billion yen year on year to 11.2 billion yen (a year-on-year increase of 28.1%), as a result of an increase in net sales. Non-operating income and expenses were generally even, and ordinary profit increased by 1.2 billion yen year on year to 11.1 billion yen (a year-on-year increase of 12.4%). Profit attributable to owners of parent was 5.0 billion yen (a year-on-year decrease of 21.6%), as a result of posting 0.2 billion yen in gain on sale of non-current assets as extraordinary income, 1.7 billion yen in extraordinary losses mainly due to loss on sale of investment securities, and a 1.2 billion yen increase in income taxes - deferred from the previous fiscal year.

The average exchange rates for the current fiscal year were 135.5 yen to 1 US dollar and 141.0 yen to 1 euro.

Results by Segment

Results for each segment are as follows:

To realize the Group 10-year vision, the Company has established three strategic domains (the Emotional Value Solutions domain, the Devices Solutions domain, and the Systems Solutions domain) based on the solutions it provides, and formulated and implemented strategies for each domain under the Eighth Mid-Term Management Plan, "SMILE145." Accordingly, reported segments have been changed from "Watches Business," "Electronic Devices Business," and "Systems Solutions Business" to the three strategic domains, "Emotional Value Solutions Business," "Devices Solutions Business," and "Systems Solutions Business." The previous Watches Business and some of the businesses included in the previous Electronic Devices Business, together with the Time Creation Business and WAKO Business in the Time Creation, WAKO and other Businesses, make up the Emotional Value Solutions Business. The Devices Solutions Business consists of the businesses previously in the Electronic Devices Business, other than those that have been changed to the Emotional Value Solutions Business. There are no changes from the previous business in the Systems Solutions Business.

a. Emotional Value Solutions Business (EVS Business)

Net sales in the EVS Business came to 170.7 billion yen, a year-on-year increase of 19.9 billion

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Disclaimer

Seiko Holdings Corporation published this content on 18 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 May 2023 06:38:08 UTC.